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Jumia Listing Statement

Yesterday it was officially announced that MTN backed Jumia has filed for an IPO in New York. The IPO could value the company at a solid $1.6bn. That puts it in line with Dischem, Resilient and Tsogo Sun. In case you forgot, Jumia is an online retailer with over 4 million users, predominantly in Nigeria.

Why in New York and not the JSE you may ask? The NYSE has the liquidity and the appetite for these types of businesses. After many successful tech IPO's in the last 10 years, US investors are not scared to put money into a company that made a loss of R2.7bn last year.

As you may have noticed, the JSE has been very unforgiving and sceptical of late. Understandably so. As the gateway to Africa, I'd say this is a missed opportunity for the JSE.

At the end of December, MTN owned 31.28% of Jumia which values their stake at R7.15bn. That is juicy. MTN has already indicated that they plan on selling the stake to pay off debts. Considering MTN's already hefty exposure to Nigeria, as well as Nigeria's propensity to turn ugly on its private sector I'd say cashing out is a good idea.


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